Kashyap_Swamy

Why I'm Long Uranium and Nuclear / Power Engineering

I guess this means that investors have plenty of time to buy nuclear stocks. Until politicans are obsessed with solar energy, biofuels - clearly stocks like Cameco will languish. In the meantime, buy the solar and biofuel stocks!! :-)
I'm only half-joking here. Stock performance will depend on where the money is in the credible near future rather than a possible faraway scenario.

Stopping Oil's Rise Before Oil Stops Ours

To all those who believe oil is "cheap at $60". Sorry, you have mixed up time scales. Oil at $60 may be cheap for 2010 or 2011 but not for 2009. OPEC spare capacity is at 5 mn bpd and will the commissioning of Khurais (1.2 mn bpd) it will increase further this year. OECD inventories are at historic highs.

Firms like Total are using super tankers to store oil and take advantage of the contango. ETF investors are subsidizing the contango trade by paying the negative roll yield.

Stopping Oil's Rise Before Oil Stops Ours

Ryan - I think you are right. the Financial Times (FT) recently estimated that the savings from the fall in oil price since mid-2008 is about $1.6 tn. This figure is comparable to the large fiscal stimulus numbers announced by Governments around the World. What is more, this effect is immediately felt by the economy.
Its a pity that the financials are driving up oil prices again, despite high inventories and lack luster demand.

Crudomania Is Over

"A current Gallup poll indicated that over 50% of the U.S. public has permanently changed their driving habits even though the price of gasoline was less in the 2008 period when compared to like period in 2007"

Bob - Could you please post a reference for this Gallup poll?

In fact, the price of most investable instruments - equities, bonds, commodities - you name it - fell by 20%-40% in 2008. I think financial deleveraging and fear were the major factors...

Someone Has to Lend in 2009: Ideas to Profit

While I agree with the macro thesis, I would suggest some additional research on individual stock names.
For example - Fluor (FLR) already trades at a premium to its peers and almost 50% of its backlog is in the refining sector which is under a lot of pressure to cut back capex. FLR is well-run company with excellent management but at this time, I would play the infrastructure theme with other stocks.

Commodities Story of the Year: Floating Oil Storage

John,
Your observation about 50m bls being less than one day demand is right, but this is indicative of a larger phenomenon. Oil inventories in OECD are at very comfortable levels (e.g. Cushing storage at 28 mn bls - highest since 2004). Recent OPEC production cuts serve to increase spare capacity, which is in effect in-ground storage.
In the long-term (5 yr horizon), I agree that decline rates will provide strong support to oil prices but I am not so sure about 2009.

Oil and the Futures Market

I don't think Sovereign Wealth Funds (SWF) of Oil producing nations would buy oil futures. Remember, buying a future contract also means that you need to take physical delivery! Why would a producer want to buy more oil? If they are just "rolling it" then there would be a HUGE contango in the front months (not just $1-$2).

Don't forget that NYMEX WTI is sweet, light crude. Arab heavy crude (which does not have a futures contract) is trading at $132/ bl. (a $10 discount but not a lot different). I don't think its all speculation...